Tuesday, May 26, 2009

Fearmongering by Fox News

I'm sure this happens nearly every day, but I don't usually get to see it because I do not have television. It is only through the Daily Show's "Moment of Zen" on May 13th that I caught a Fox News ad.
(dramatic music) "These pictures look identical, but one contains a secret message. What's hidden inside, and how terrorists could use it against us, tomorrow at 10."

What this really means to you:
NOTHING! Seriously, this is blatant fearmongering to get ratings.

What the news program probably talked about is called steganography. It's been around for at least 600 years in some form or another. In the form described in the ad, it's been around for at least 20 years. The computer program Stego was written by a former Playboy model to encode information in subtle changes in digital images. This method of encryption was even featured in an episode of the television show Millennium back in 1997. This is nothing new. Everyone can use steganographic encryption, so it should be no surprise that terrorists, a subset of everyone, use it.

Terrorists' use of this encryption has no real effect on you. The Fox News ad may leave you wondering how you can protect yourself from this threat, so you would want to watch their show to find out. It is a trick. There is really nothing you can do, unless you're some kind of expert in this technology and you are able to scour the internet for information encrypted in images. But if you're one of those experts, you sure as heck don't need any of the information Fox News is giving out. In fact, when you realize that you can't do anything about it, you may become even more afraid, which would keep you tuned in to Fox News to learn more about threats in case there is something that you can do.

Our friends in the CIA and FBI are on it. Accept that you can't do anything, and enjoy the good things in your life. Turn off Fox News and spend some quality time with the people you love.

Saturday, May 23, 2009

Discount Prices - Really a Bargain?

Summary: Decide in advance how much something is worth to you based on only the features and utility of the product. Never pay more than that, and you should be alright. Don't think you're getting a good deal just because a price is marked down.

Three Examples:
Amazon.com discounts practically everything. I don't know that I've ever seen something on Amazon selling at their "list price". Amazon gives different people different prices for things, and prices change over time, so I can't cite anything stable, but here's what I'm looking at right now: Valkyrie (Single-Disc Edition) (2008), List Price: $29.98, Price: $15.99 (47% off!). Since when do DVDs cost $29.98? I've only seen prices like that at Suncoast, and promptly left the store. The List Price is made up. It is a fabricated number that bears almost no relationship to the product's production cost, distribution costs, licensing fees, etc.... Licensing is the lion's share of the costs, which is why you can get Betty Boop DVDs for $1, but Akira Kurasawa films cost twice as much as most new American movies. Walmart does the same thing on their website (same list price for Valkyrie, but the price is $15.86), but walking in the store shows shelves of DVDs for $13 or so with no "list price". The MPAA, MGM, TriStar, and whoever else are not losing money on those sales. The worth of a DVD is a totally subjective thing, and any prices you see for a DVD are over its costs to get to you. Don't let a website convince you that a DVD is worth $30, so you should be happy to buy it for $16. Decide for yourself if a particular DVD is worth $16 to you while ignoring the extra, unhelpful information.

Steam's video game experiment is interesting. Here's a highlight:
"When Valve held its recent holiday sale, titles discounted by 10 percent (the minimum) they saw revenue (not unit) increases of 35 percent. At a 25 percent discount, revenue was up 245 percent. At 50 percent off, revenue was up 320 percent, and at a 75 percent discount, revenue was up an astonishing 1470 percent."

Also important to note is that "retail sales did not change at all". So, what happened here? It is hard to tease apart how many of the consumers just buy hyped-up new games no matter what, how many had a set price in mind for the value of a particular game (or the value of entertainment per hour), and how many were just attracted to "this game is on sale for $Y, even though it's worth $X!" Base game prices are largely fictional values, heavily related to what the industry believes will make them the most money, but they hardly ever experiment like this. There is a belief that selling games at a lower base price will make customers believe that the games are not as good. That belief is somewhat accurate. Most people do believe that price reflects quality, and there is at least one great experiment with blind taste-tests of wine that shows what a really horrible way that is of predicting quality. So, the best way to sell a game may unfortunately be to fabricate a really high base price that some people will pay, then put the games on "sale". This is how millions of other products are routinely sold. News flash: video games do not become less fun when their prices change, or when they're used, or when they're a few years old. To know how good something is, get reviews from a trusted source, and ignore everything else.

San Lorenzo Market is a great example of what most of the world is like when it comes to listed prices and sales prices. Haggling is relatively foreign to America. I found myself in San Lorenzo in need of a new belt. The proprietor of the first stall I saw offered me a belt I liked for 40,000 lira. I said that I wanted to shop around before making a decision. Within twenty seconds, with me only repeating that I was going to shop around, the price dropped in stages down to 15,000 lira. My friend decided to buy a leather trenchcoat. The coats had prices printed on them that, again, everyone knows are complete fabrications. No one pays those prices. We stopped in to haggle once or twice per day for three days before he finally bought the coat he liked for less than half the listed price. Each salesman's job is to make the customers think they are getting an expensive (and therefore high-quality) product for cheap, when really each item has a real price the salesman won't go below, and every time an item sells for more, it's gravy for the salesman.

Exceptions - When a Bargain Really is a Bargain:
Sometimes businesses accidentally order too much inventory and need to get rid of it to make room for other products. Sometimes products are discontinued and have to get dumped. Sometimes companies go out of business and their assets have to be liquidated quickly for creditors. Sometimes no one will buy a totally safe baby's carseat at regular price just because an earlier model was recalled. This is how we end up with Woot and Overstock.com.

Tuesday, May 12, 2009

Movie Advertisements

This is nothing new, but it's on my mind. How often to find yourself watching or listening to an advertisement for a movie that just came out, and the ad boasts "Number 1 at the box office!" or "America's favorite comedy!" or some other similar claim? It happens often. Advertisers are trying to take advantage of our natural herd instincts or the bandwagon effect. What they're often neglecting to say, or saying in fine print so as not to get busted for false advertising, is that the movie was #1 at the box office for just a day or a weekend. A movie may have a huge opening weekend, then bomb as everyone who saw it lets their friends know how bad it was (Jurassic Park 2, seriously), but the ads focus on that opening weekend stat. That "favorite comedy" might be the only one out at the time among dramas and action flicks. They don't give you the parameters of their comparisons. There is a Superocity comic strip that comments on the phenomenon.

So, advertisements like that are not relevant to your decision-making process. They are inherently misleading. How, then, do you decide what movies are worth seeing? Find people with similar tastes to yours, and ask them what they enjoyed. There will always be people who go see a movie the opening weekend without any valid ability to predict the quality of the movie. Let them take the risks while you benefit from their reviews.

Look at these two lists: Gross for 3-day Opening Weekend and All-time Gross (not adjusted for inflation, or else Gone With the Wind would be up at the top). Notice that 16 of the top 20 opening weekend movies are sequels, since quality could be predicted to some degree by the preceding movies, and 10 of the top 20 all-time are sequels. Jurassic Park 2 was the highest opening weekend movie of all time for four years, but 60th overall, because Jurassic Park was so good. We got faked out on that one. So, there may be a correlation between quality of a movie and quality of its sequel, but it's not a sure bet. Total gross minus opening weekend gross would be a better measure of quality that total gross itself. DVD sales would also be telling. Titanic, Star Wars ANH, and ET did so well because people told their friends to see them, and many people went more than once.

There are only a few reasons why anyone would rationally go to an opening movie instead of waiting for reviews from people with similar tastes:
To avoid spoilers. No one can ruin the twist ending for you if you see it first.
Opening night is a cultural event. Star Wars, Harry Potter, Serenity; dress up and party with the other fanatics.
You write movie reviews.

Tuesday, May 5, 2009

Spam Flu

Every day for the last week my Google Reader has been bombarded with posts and articles about Swine Flu. The patterns of media attention are interesting, but unsurprising. The word "news" itself tells us that the content will primarily be things that are new to us. Novelty gets reported, and commonplace events are ignored. Man Bites Dog, right? Let's break down the progression:

1) Swine Flu outbreak in Mexico contributes to some deaths. Had you heard of Swine Flue before this? Probably not. It's new! And it kills people! News sources clamored to hype it up, to breed fear among people, to draw in consumers and sell advertising. They teased us with information that there was a mysterious danger out there, and we would have to keep consuming their news to find out how much danger there was to us, and how we could protect ourselves. Our brains hone in on this using automatic heuristics that generally helped keep our species alive for millennia.

2) Knowledgeable people step forward to dispense facts. Wash your hands. Stay at home if you're sick. We're probably all going to be fine. The risk is exaggerated. This information is new compared to the information in wave 1, even though it's old overall, so it still draws our attention and ratings.

3) Confusion is maintained in the face of wave 2 by constant updates on any fear-invoking event. Calming and frightening information is presented piecemeal to keep us interested, to keep us from figuring out how to feel and getting complacent with that feeling. First death in America! But it was a toddler from Mexico! Schools are closing to protect our children! Even though there was no evidence of Swine Flu! Swine Flu confirmed death toll is somewhere between 7 and 160 pending more tests! The regular flu kills 35,000 Americans each year, mostly the elderly, infants, and people with compromised immune systems! Another person just died! Swine Flu is no worse than the regular flu! We are drawn to seek more information until we can confidently declare that we are safe.

4) Eventually the situation is handled, and confusion is resolved. The "epidemic" is controlled by response measures. Evidence builds up until there is a consensus. We are saturated with information about the topic, and get bored with it. Each person has decided how they are going to respond, be it continuing life normally with confidence or locking oneself in a basement with a shotgun and canned beans. The novelty dissipates. The media looks for some other shocking new item to sell.

Now, I am selective with my news sources, so I probably missed most of the junk news out there. I have been impressed with the consistent quality of the information I got from ScienceBlogs.com. Sources with integrity stay in wave 2, and only try to educate instead of fear-monger. We should demand higher standards in our media. The freedom of the press should not include the freedom to incite damaging panic among people who just lack the education to counter their natural brain processes.

Monday, May 4, 2009

Science - What It Is and Is Not

I too often encounter people who fundamentally lack an understanding of what science is, and this leads to problems in communication and understanding other ideas. Many people lump all kinds of modern technology and knowledge into their definitions of science, and that is woefully inappropriate. I meet middle school and high school students who tell me that they love science, when they actually just enjoy trivia about animals and volcanoes. Hippies (for lack of a better term) often accuse science of causing cancer and pollution and climate change. Some religious fanatics selectively cite a few news reports about some corrected or disproven theory or other as they proclaim that science tells us lies and misinformation, so we should ignore it. Science is not chemicals or information or beliefs or news reports or advice or a group of people.

Science is the method by which we determine the predictability of phenomena given specific conditions.

That's it. Science is a method that takes advantage of a number of experimental and statistical techniques to let us figure out the probability that phenomena Z will happen given conditions A, B, C, D.... As early as second or third grade we are taught the "scientific method" of 1) asking a question, 2) forming a hypothesis, 3) testing the hypothesis, 4) analyzing the data, 5) drawing conclusions (or some variation of these steps depending on your school district).

Example: 1) Does smoking cause lung cancer? 2) Since a true experiment with random assignment would be unethical, we will resort to some retrospective and longitudinal observations of smokers and non-smokers for X amount of years, and see who gets more lung cancer. 3) We collect the data. 4) (these numbers are made up) .03% of the non-smokers got lung cancer over X years, and 3% of smokers got lung cancer. 5) Since this is not a true experiment, the results are correlational, but we have a strong theoretical construct for causality, since there is no good data supporting the idea that a predisposition for lung cancer causes smoking, and we know from cellular studies that the chemicals in the smoke damages cells. So, smoking was associated with a 100x relative rate of developing lung cancer, which amounted to 3% of the smoking participants over X years. Further variation as a result of quantity smoked, age, sex, race, family history of cancer, nutrition, etc... should be analyzed by future studies.

In the example above, science was the method used, involving an observational technique, to determine the predictability (3%, or 100x relative risk) of an outcome (lung cancer) based on a condition (smoking for X years).

Some fields have good track records of coming up with theories with near-100% predictability. Chemistry and physics are good examples. We know how a whole lot of chemicals behave in given conditions, and they always behave that way in those conditions. Newtonian physics is pretty darn consistent for most of our purposes, but it threw us for a few loops at relativistic speeds, extreme densities, and a few other conditions. If you drop a ball, it will accelerate at the same rate and direction every time as long as you are in the same place. Quantum physics is a different beast.

Other fields have more trouble, usually because it is too hard to account for the thousands of conditions that contribute to the outcomes. Psychologists are happy to understand even a quarter of the variance in most phenomena. Medical doctors try to give the most probable diagnosis given the scientific research on various symptoms, then prescribe the most probably effective treatment (if they're knowledgeable of the research, though they can also fall back on whatever the drug company representatives bribed them to give). When we deal with probabilities below 100%, even our best practices are wrong sometimes, and that is where some people get confused and offensive, especially if they are accustomed to believing in things they were told are 100% certain, or are overwhelmed by complexity and ambiguity. We will be wrong sometimes, and that is not the fault of science, it is the fault of a complex world in which some things are affected by thousands of variables. People are especially troublesome with our many different genes and experiences (which can affect gene expression).

I have heard so many times, "Those scientists don't know what they're talking about! Science says one thing, then the opposite!" That is usually not what is happening. The media simplifies the often complex results of research, and people's brains simplify the news even more to make it easily memorable and usable. One day we find out that a food increases the risk of stroke; the next day we learn that it decreases the risk of colon cancer, but the complexity of the situation is lost in the simplification to "bad" and "good", and people start thinking inaccurate things about the process, what happened, and what science is.